What is Dollar-Cost Averaging (DCA)?
Dollar-Cost Averaging is an investment method where fixed amounts are invested at regular intervals, reducing entry-point concentration over time.
Frequently Asked Questions
Is DCA better than lump sum investing?
It depends on market path and investor constraints. Lump sum can benefit from earlier exposure in uptrends, while DCA can reduce timing regret in volatile periods.
Why does market regime matter?
DCA is path-dependent. Bear, sideways, and bull regimes can produce very different drawdown, recovery, and terminal outcome profiles.
What is sequence risk?
Sequence risk is the impact of return order. Early losses or gains can materially change long-term outcomes even with similar average returns.
What is contribution timing risk?
Contribution timing risk is uncertainty introduced by when capital is deployed. Different schedules can change purchase prices and dispersion.
Are simulation outputs financial advice?
No. Outputs are analytical and assumption-dependent, intended for decision support rather than personalized recommendations.